Mumbai, May 17: Swiss-Swedish electrical engineering group ABB plans to stump up almost $1 billion to raise its stake in Indian subsidiary ABB to 75 per cent from 52.11 per cent through an open offer.

The news sent the ABB stock soaring on the Bombay Stock Exchange. It finally closed 24 per cent higher at Rs 831.45.

The Swiss-Swedish parent announced that it would pay Rs 900 per share in the open offer, which is 34 per cent higher than the stocks closing price last Friday.

ABB is expected to incur an outgo of up to $965 million in this open offer to acquire up to 4,85,10,997 shares, representing a 22.89 per cent stake in its Indian arm. The open offer will commence on July 8 and close on July 27. Payment for the shares is expected on August 10.

In a conference call from Zurich, the ABB top management said they were raising their stake in the Indian subsidiary as it would offer them greater control to expand existing business in India, divest other businesses and make acquisitions.

The move to increase its stake in ABB to 75 per cent will also bring the Indian subsidiary on a par with the parents shareholding in other emerging market subsidiaries such as the one in China.

The ABB management is banking on high potential for growth in the sub-continent.

Analysts said the seller of power equipment might be keen to tap the growth expected in Indias electricity transmission and generation as well as higher planned investments in industries such as steel and cement.

While ABB saw a 75 per cent stake as an important threshold in India, the management clarified that it had no intention to delist the Indian subsidiary from the local bourses and go in for a 100 per cent shareholding like several other multinationals have done in the past.

The acquirer informed the Indian stock exchanges that it did not intend to buy equity shares that might result in the public shareholding falling below the minimum level of 10 per cent according to the listing agreement.

Global analysts have pointed out that ABB, which is sitting on more than $6 billion of cash, may have decided to increase its stake in the Indian arm as it has not been able to zero in on other acquisitions abroad.

Last month, ABB bought US software company Ventyx, which is focused on electricity generators and distributors, for over $1 billion.

According to ABB, the Indian subsidiary posted revenues of $1.4 billion and profit before tax of $117 million in 2009.

The open offer will be managed by HSBC Securities and Capital Markets (India) Private Limited.